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  • Minnesota Commerce Department offers relief to vehicle protection product warrantor registrants

    State Issues

    On March 30, pursuant to the Commissioner Order issued on the same day, the Minnesota Commerce Department issued Regulatory Guidance 20-14E to vehicle protection product warrantor registrants. The guidance provides temporary, emergency relief to vehicle protection product warrantors with respect to March and April registration renewals under Minn. Stat. § 59C.04. Renewal deadlines for registered vehicle protection product warrantors whose registration will expire during April or May, are extended up to 45 days from the prescribed due date.

    State Issues Minnesota State Regulation Service Contracts Covid-19

  • New York extends consumer protections for vehicle leases

    State Issues

    On December 23, the New York governor signed S 3631, which amends the state’s insurance law to increase protections for New York consumers from unplanned charges at the end of a motor vehicle lease. The definition of “service contracts” is broadened to cover more comprehensive service contracts on motor vehicles leased for personal use. Service contracts covered by the law will now include agreements that apply to accidental damage and excess use and wear and tear, including missing parts of the vehicle, and items not covered by a warranty or other service agreement, as long as such services do not exceed the purchase price of the automobile. The law became effective when signed.

    State Issues Auto Finance Auto Leases State Regulation Consumer Protection Service Contracts

  • Rhode Island says service contracts are not insurance

    State Issues

    On July 15, the Rhode Island governor signed H 5674, which clarifies that service contracts, vehicle theft protection product warranties, and vehicle maintenance agreements are not considered insurance and are therefore exempt from the state’s insurance code. The bill also amends definitions under the law’s chapter relating to service contracts. The amendments take effect January 1, 2020.

    State Issues State Legislation Service Contracts Insurance

  • Hawaii amends motor vehicle service contract definition

    State Issues

    On July 2, the Hawaii governor signed HB 154, which clarifies that motor vehicle service contracts regulated by the Insurance Commissioner include contracts for certain motor vehicle repair and replacement services. The bill amends the law’s definition of “service contract” to include a specified list of repair or placement activities related to motor vehicles. The amendments are effective on July 1, 2020.

    State Issues State Legislation Auto Finance Service Contracts

  • Iowa amends licensing requirements for service companies

    State Issues

    On May 16, the Iowa governor signed SF 619, which, among other things, amends the state’s service contract provider provisions to require any provider that issues, offers for sale, or sells motor vehicle service contracts in the state to be licensed as a service company. Persons who provide support services or work under the direction of a licensed service company, including those who provide marketing, administrative, or technical support, are not subject to the licensure requirements. In addition, SF 619 also prohibits a licensed service company that offers motor vehicle service contracts from making certain false, deceptive, or misleading statements regarding (i) the service company’s affiliations with a manufacturer or importer; (ii) a warranty’s validity or expiration date; or (iii) whether a contract holder must obtain a new service contract in order to maintain coverage under an existing contract or warranty. Furthermore, SF 619 prohibits a lending institution from requiring “the purchase of a motor vehicle service contract or residential service contract as a condition of a loan or the sale of any property or motor vehicle.” The amendments are effective immediately.

    State Issues State Legislation Licensing Service Contracts Auto Finance

  • New Mexico modifies the Service Contract Regulation Act

    State Issues

    On April 4, the New Mexico governor signed SB 350, which amends the state’s Service Contract Regulation Act to prevent providers from including automatic renewal provisions within service contracts unless they are clearly disclosed. The Act defines a service contract as a contract in which a provider is obligated for a specific period to repair, replace, or perform maintenance on property described in the contract, or to reimburse or indemnify the holder for costs to repair, replace, or perform maintenance on that property. Under SB 350, in addition to the automatic renewal requirements, the bill allows a service contract holder to provide notice, at least 30 days in advance, of its intent not to review a service contract. If a holder cancels a service contract, subject to the bill’s timing restrictions, the provider is required to refund the contract holder one hundred percent of the unearned pro rata provider fee, less any claims paid, and the provider may charge an administrative fee of up to 10 percent of the purchase price of the contract. The bill is effective June 14.

    State Issues State Legislation Consumer Finance Service Contracts

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